Business case for Facilitators
From MicroJustice
[edit] Problem Indication
Latin American countries have some of the most generous legal systems in the world, which incorporate numerous social and economic rights, yet they rank very low in terms of securing those rights for all, particularly for the poor. Madison (1988: ch. 49) showed in his research that one of the main reasons why the underprivileged find it difficult to access the legal system is that, since its origin, the judiciary has been placed too far removed from the people. Factors that lead to the gap between law and social practices are: lack of information (Buscaglia 2001), economic costs (Thomson 2000: 415), Corruption (Thomson 2000:74-5, 254-60), Formalism (Thomson 2000: 425). The Microjustice Initiative is a novel approach to these problems, based on bottom-up innovations. The goal is to create paths to justice that are less expensive, less time-consuming and less burdensome. It strives to increase the efficiency of the justice system by making better use of the forces of supply and demand. Microjustice model developed means offering real access to rights as an alternative and complementary to the formal legal system. The Government of Bolivia intends to provide real access to justice for the poor. The Microjustice program fits very well in the policy of making justice accessible and affordable for the lower social classes, guaranteeing real justice and respect of basis human rights. In the quest for developing a structural and sustainable system to enhance access to rights for all, the Microjustice approach has been developed by ILA and Tilburg University combining field work and academic research in one product, a first pilot Microjustice program in Bolivia has been set up since early 2007. The new model developed in Bolivia will also serve as basis for the development of Microjustice in other parts of the world. The MicroJustice initiative’s goal is to develop Microjustice services as part of the existing micro services as micro credits and micro insurances. MicroJustice aims to give access to justice to people that are not able to ensure their legal position. As all micro services, MicroJustice will be based on the principle of solidarity within the local community. The local legal community will be addressed to provide its knowledge in order to enable people, through a combination of web technology and facilitating services, to find solutions for their legal problems. MicroJustice is working with facilitators. Their target audience is clients who are not able to solve their issues themselves.
Aim is to organize the work that clarifies the Business model for MicroJustice facilitators. Will facilitators form part of the program organization, or will they be independent entrepreneurs? How will their quality be guaranteed? What is the economic basis on which the facilitators will work? Will they contribute to maintaining the central organization?
The way managerial capabilities succeed depends on the design adequacy of the conditions of the organizational form (Zelenovic 1982). Those conditions decide the organization’s responsiveness or controllability (Zelevnovic 1982). In order to organize Microjustice in such a way to successfully expand to other countries there must be found an organizational form which best fit with these constraints. Within many theories is argued that markets and organizations should not be viewed as two mutually exclusive governance structures (Douma & Schreuder 2002). In the real world there are many organizational forms that fall somewhere between market and organizations (Douma & Schreuder 2002). The relationship concerning MicroJustice and its Facilitators will also fall within this category which they call hybrid forms (Douma & Schreuder 2002). Within this paper there will be discussed several hybrid forms which can be applied to the organization of MicroJustice to become successful in working with their Facilitators.
Comparative analysis of the mechanisms available to govern these kinds of business relationships has been undertaken by scholars working within a branch of institutional economics that is now known as transaction cost economics (Williamson 1975, 1985). Briefly, transaction cost economics analysis of governance structure alternatives explores the following fundamental question: when does a manager pursuing the kinds of business objectives described above use the market, rely on her own organization, or use a mixed-mode relationship (Ring & van de Ven 1992). Transaction cost economics can also be used to explain why we observe different organizational forms, such as peer groups, simple hierarchies, U-form firms and M-form firms in different circumstances ( Douma & Schreuder 2002). That is why this theory will be taken into account by analyzing the organizational forms for MicroJustice.
Besides the transaction cost theory, the agency theory will also has an influence on the organizational form for MicroJustice. Agency theory in its simplest form discusses the relationship between two parties (Douma & Schreuder 2002). Agency relations can be found both within firms (manager and subordinate) and between firms (for example, licensing and franchising) (Douma & Schreuder 2002). The principal-agent problem arises when a principal compensates an agent for performing certain acts that are useful to the principal and costly to the agent, and where there are elements of the performance that are costly to observe. This is the case to some extent for all contract that are written in a world of information asymmetry, uncertainty and risk . The principal agency theory will be applied within this research because by using this theory the relationship between MicroJustice and its Facilitators can be analyzed.
Alliances and similar cooperative efforts are receiving increased attention in the strategic management literature (Ring & van de Ven 1992). These relationships differ in significant ways from those governed by markets or hierarchies (Ring & van de Ven 1992). Within this paper we address alternative forms of governance in the case for MicroJustice where multiple Facilitators cooperate. We explore their characteristics and follow this with a discussion of criteria which we believe bear on the choice of governance: risk and reliance on trust. We offer propositions on relationships between these criteria and the choice of governance mechanisms. In the concluding section of the paper we explore the implications of our analysis for MicroJustice.
[edit] Problem statement
What is the best organizational form MicroJustice should adopt concerning the relationship between MicroJustice and the facilitators?
[edit] Research Questions
1) What is MicroJustice?
2) On what type of market is MicroJustice active?
3) What is the relationship between MicroJustice and its Facilitators?
4) How should the relationship between MicroJustice and its Facilitators be organized?
5) What are the effects of transaction costs on the choice between markets and organizations and among organizational forms?
6) What is the best organizational form MicroJustice should adopt concerning the relationship between MicroJustice and the facilitators?
